The Reserve Bank of India has cancelled the licence of Pune-based Rupee Co-operative Bank Ltd as the lender does not have adequate capital and earning prospects. However, the RBI said that in compliance to an order of the High Court of Bombay, its direction will become effective after six weeks. Consequent to the cancellation of its licence, ‘Rupee Co-operative Bank Ltd, Pune’ stands prohibited from conducting the business of banking which includes, among other things, acceptance of deposits and repayment of deposits with effect from September 22, 2022.
The licence has been cancelled because the bank does not have adequate capital and earning prospects and as such, it does not comply with certain provisions of the Banking Regulation Act, 1949.
- As per the data submitted by the cooperative bank, more than 99 per cent of the depositors are entitled to receive full amount of their deposits from Deposit Insurance and Credit Guarantee Corporation (DICGC).
- On liquidation, every depositor would be entitled to receive deposit insurance claim amount of his/her deposits up to Rs 5 lakh from DICGC.
- As of May 18, 2022, DICGC has already paid Rs 700.44 crore of the total insured deposits.